Washington, DC

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance

10/15/2015

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Date

The claimant is a Federal civilian employee of the Department of Defense (DoD) in Panama City, Republic of Panama.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of living quarters allowance (LQA).  We received the claim on September 16, 2014, and the agency administrative report (AAR) on June 8, 2015, from the Civilian Personnel Directorate (CPD), Department of the Army, Europe (USAREUR).  For the reasons discussed herein, the claim is denied.

The claimant retired from active duty military service effective September 30, 2013, in the Republic of Panama (hereafter referred to as Panama).  While residing in Panama and on terminal leave from the military, he was recruited for and accepted employment, on July 27, 2013, with the private U.S. firm Expeditionary Technology Services, Inc.  In January 2014, he resigned his contractor employment with Expeditionary Technology Services, Inc., and was subsequently appointed to a Federal service position with DoD effective April 21, 2014, in Panama City, Panama. 

The agency determined the claimant did not meet the LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) section 031.12b, which requires that an employee recruited outside the United States must, prior to appointment,[1] have been recruited in the United States by his or her previous employer and have been substantially continuously employed by such employer under conditions providing for return transportation to the United States. 

The agency states in its AAR, “it is evident from the record that [claimant] was recruited by the U.S. firm while he was still in the military service and assigned to the Republic of Panama in July 2013; his actual employment with the firm commenced on 12 August 2013.  What is more, [claimant’s] contractor firm did not provide for his return transportation to the United States.”  They also indicate that “his contractor employment was intervening employment between his military service (and shortly thereafter) and his federal civilian employment, which cannot be positively reconciled with the provisions of the DSSR section 031.12b and the DODI 1400.25.V1250.”

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  Within the scope of these regulations, the head of an agency may issue further implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments.  Department of Defense Instruction (DoDI) 1400.25, Volume 1250, cited by the claimant, implements the provisions of the DSSR for DoD employees.  Because LQA is a discretionary allowance, agency implementing regulations may be more restrictive, but not more permissive, than the DSSR; i.e., they may impose additional limitations on the granting of LQA but may not extend benefits that are not otherwise permitted by the DSSR.

DSSR section 031.11 states LQA may be granted to employees recruited in the United States: 

Quarters allowances prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States. 

Relative to these criteria, DoDI 1400.25, Volume 1250, defines “U.S. Hire” as follows:

U.S. Hire.  A person who resided permanently in the United States or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment. 

Thus, an employee’s status as a “U.S. hire” is based on physical residency at the time of recruitment for the position in question. 

Although the claimant does not directly assert LQA eligibility under DSSR section 031.11, he appears to characterize himself as a U.S. hire and states that his “permanent residence has always remained my home of record as indicated in my resume, in Raleigh, NC.”  However, the plain language of the term “resided in the United States” clearly connotes physical residency in the United States during the entire recruitment process per the definition of “U.S. hire” in DoDI 1400.25, Volume 1250; i.e., from when he initially applied for through the time he accepted the position in question.[2]  This language does not allow for a more expansive interpretation such as a “permanent residence” or “home of record” in the United States.  Therefore, whether an employee is deemed to be recruited in the United States or outside the United States is dependent on the actual physical residency of the employee when recruited, not the existence of a legal or “permanent” residence at some other place other than where the employee is actually residing at that time.  The claimant also states:  “...after resigning from the DoD contractor position in January 2014, I returned to the U.S…. [and] was subsequently offered the DoD civilian position in Panama, while residing in the U.S. at my home of record."  However, this does not establish his physical residency in the United States during the entire recruitment process; i.e., from when he initially applied for through the time he accepted the position in question.  As such, the claimant does not meet LQA eligibility criteria under DSSR section 031.11 or its implementing regulations in DoDI 1400.25, Volume 1250. 

DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States under the following circumstances:

a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and

b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:

(1) the United States Government, including its Armed Forces;

(2) a United States firm, organization, or interest;

(3) an international organization in which the United States Government participates; or

(4) a foreign government

and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States.  [Italics added]

The claimant’s place of residence in the place to which the quarters allowance applies (Panama) is fairly attributable to his employment by the United States Government, and meets DSSR section 031.12a.  However, prior to appointment, he was employed by Expeditionary Technology Services, Inc., a qualifying employer under section 031.12b (2), but the firm had recruited him in Panama rather than in the United States or one of the enumerated territories or possessions.  That the claimant’s contractor position required “in-processing at JIATF-S in Florida followed by deployment from Florida to Panama” does not establish that he was residing in the United States when he was recruited by Expeditionary Technology Service, Inc.; i.e., when he initially applied for the position. 

The singular usage of “such employer” in section 031.12b requires that the employee have had only one such qualifying employer prior to appointment and consequently, the employer immediately preceding appointment be the same employer that recruited the employee in the United States or one of the other qualifying locations.  Further, section 031.12 also requires that the employee have been substantially continuously employed by such employer under conditions providing for return transportation to the United States.  The claimant included in his claim a copy of the "Questionnaire for LQA Determinations” signed by him on December 16, 2013, prior to his appointment.  Under "Section E:  Contractor," where the claimant reported his employment with Expeditionary Technology Services, Inc., he responded “no” to statement 4:  “I have a current transportation agreement to the U.S.”  Further, there is no contemporaneous documentation in the claim record such as an employment contract or relocation agreement showing that Expeditionary Technology Services, Inc., at the time of hire, provided him return transportation benefits to the United States obligating itself to repatriate him to the United States upon the termination of his employment.  The claimant was recruited in the United States by the U.S. Navy, as evidenced by his DD Form 214, Certificate of Release or Discharge from Active Duty, showing his place of entry into active duty as New York, New York.  His subsequent employment by Expeditionary Technology Services, Inc., broke the continuity of employment by a single employer overseas (i.e. “such” employer that recruited him in the United States).  Therefore, the claimant does not meet DSSR section 031.12b because he was neither recruited in the United States or other qualifying location nor provided return transportation to the United States by Expeditionary Technology Services, Inc. 

The claimant asserts eligibility under the DoDI 1400.25, Volume 1250, under which “former military and civilian members shall be considered to have "substantially continuous employment" for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired and/or separated member or employee uses any portion of the entitlement for Government transportation back to the United States, whichever occurs first."  He states in his claim:  “I’m still within one year of my military retirement and my military return transportation is still valid.  Under those provisions I believed I was LQA eligible.” However, agency implementing regulations such as DoDI 1400.25, Volume 1250, supplement but do not supplant the requirements of the DSSR.  Therefore, the requirements of DSSR section 031.12b must still be met before the DoDI's "substantially continuous employment" provision may be applied (hence its prefacing as "under the provisions of Section 031.12b").  Within this context, the DoDI 1400.25 essentially allows former military and civilian employees a period of up to one year of unemployment after separation (or loss of transportation entitlement) to be considered "substantially continuously employed" by the military or civilian employer, but that military or civilian employer is presumed to have recruited the employee in the United States consistent with DSSR section 031.12b.  In the claimant’s case, his intervening employment by Expeditionary Technology Services, Inc., renders the DoDI "substantially continuous employment" provision inapplicable to his circumstances.  Further, since the return transportation must be provided by the employer prior to appointment (in this case, Expeditionary Technology Services, Inc.), any retention of transportation benefits from his military service is irrelevant for purposes of establishing eligibility under DSSR section 031.12b. 

The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQAs to agency employees.  Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  Thus, an agency may withhold LQA payments from an employee when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable.  Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment.  Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  As discussed previously, the claimant has failed to do so.  Since an agency decision made in accordance with established regulations as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the decision.

This settlement is final.  No further administrative review is available within OPM.  Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.

 

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